The action of bath applied NPY (1-1,000 nM) was investigated on hippocampal slices of the rat with extra- and intracellular recording. Neuropeptide Y (NPY) at 10-1,000 nM caused a concentration-dependent, long-lasting reduction of excitatory postsynaptic potentials (EPSPs) in the hippocampal subfield CA1 and the area dentata, and an even stronger reduction of population spikes. Paired pulse experiments with low intensity, stimulation-evoked PSPs showed a marked increase in facilitation in the presence of NPY, indicating a presynaptic action. Spontaneous burst firing of CA1 pyramidal cells in low calcium, high magnesium medium was reduced, indicating a partially postsynaptic inhibitory action of NPY on their dendrites. Intracellular recording from CA1 somata during NPY administration revealed a reduction of the amplitudes of excitatory-inhibitory postsynaptic potential (EPSP-IPSP) sequences in the absence of changes in membrane potential and conductance. Accommodation of firing during long depolarizing pulses and afterhyperpolarizations were unchanged. The innervation pattern of NPY immunoreactive fibers in the same regions was studied in slices adjacent to the ones used for electrophysiology by using antisera against NPY and light and electron microscopy. There is a dense innervation of CA1 by NPY-immunoreactive axons and terminals, particularly in the stratum moleculare. NPY-immunoreactive neurons are present in the stratum oriens and pyramidale. The NPY labeled axons of the stratum moleculare participate in numerous synaptic contacts with the smaller dendritic elements in this layer, many of which belong to pyramidal neurons. These observations provide evidence for a dendritic NPY-immunoreactive innervation of CA1 neurons, which is in keeping with the electrophysiological effects of NPY on pyramidal neurons.(ABSTRACT TRUNCATED AT 250 WORDS)